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Price of Gold Fundamental Daily Forecast – Mixed Fundamentals Causing Rangebound Trade

Gold Price Prediction – Prices Consolidate Following Brexit

Gold is being pressured on Tuesday by a stronger U.S. Dollar and increased appetite for risk. The catalysts behind the selling are upbeat comments from Chinese officials which signaled more stimulus to stabilize a slowing economy, and emphasized that China is seeking a strong start in the first quarter. Meanwhile, the U.S. Dollar strengthened after the release of weaker than expected data from Germany.

At 1149 GMT, February Comex gold futures are trading $1289.30, down $2.00 or -0.15%.

Reuters is reporting that China on Tuesday signaled more stimulus measures in the near term as a tariff war with the United States took a heavy toll on its trade sector and raised the risk of a shaper economic slowdown.

The world’s second-largest economy will aim to achieve “a good start” in the first quarter, the National Development and Reform Commission (NDRC) said in a statement, indicating the government is ready to counter rising pressure. Central bank finance ministry officials gave similar assurances.

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The U.S. Dollar rose against a basket of currencies on Tuesday led by a plunge in the Euro. The single-currency fell after data showed Germany’s economy slowed in 2018, underscoring fears about a broader slump in Europe.

Forecast

Gold has been rangebound for nearly two weeks due to mixed fundamentals. Underpinning the market has been the dovish Fed which recently signaled it may take a break from further rate hikes until the stock market volatility stabilized and the global economy started to show signs of strengthening.

However, the Fed’s comments also ignited a strong rally in the equity markets. This increased demand for risk helped put a lid on gold prices.

The combination of the fundamentals has led to the rangebound trade. We don’t expect to see any major movement in gold until it breaks out of its $1300.40 to $1278.10 trading range. In the meantime, it’s like to continue to straddle its mid-point at $1289.20 over the near-term.

This article was originally posted on FX Empire

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